[ITS] Volume Based Buy and Sell Momentum by 2tm

The Volume-Based Buy and Sell Momentum indicator by 2TM is a custom momentum analysis tool originally developed for NinjaTrader, now adapted for TradingView. It combines volume behavior, rate of change (ROC), and smoothed moving averages to detect directional momentum and potential trade bias shifts based on volume delta dynamics.

🔍 How It Works:
Volume Shift Detection:
Tracks whether volume increased or decreased compared to the previous bar.
If volume increases, the ROC is added to a positive momentum tracker.
If volume decreases, the ROC is added to a negative momentum tracker.
Composite Delta Momentum:
Adds both positive and negative volume-based ROC components to create a total delta line.
Calculates a dual Simple Moving Average (SMA) smoothing over this data to represent a baseline expectation.
The difference between actual delta momentum and the smoothed baseline is visualized as a histogram.
Signal Smoothing:
The delta momentum is further smoothed using Exponential Moving Averages (EMA) to form:
PVI_NVI: Smoothed net volume influence line.
PEMA: A slower average of the above for signal confirmation.
Color-Coded Histogram:
The histogram reflects the real-time difference between raw and smoothed delta volume.
Momentum shifts are color-coded for quick visual recognition:
Bright Green/Lime: Bullish momentum increasing.
Dark Red/Maroon: Bearish momentum increasing.
Lighter colors indicate weakening trends.
Optional Bar Coloring:
If enabled, candle bars on the chart are dynamically colored based on volume momentum conditions:
Green-tinted bars when bullish volume momentum is confirmed.
Red-tinted bars when bearish volume momentum is confirmed.
Gray bars when no clear trend is present.
🛠️ How to Use:
Trend Confirmation: Use the histogram and PVI/PEMA crossover to confirm trend direction. For example:
When the histogram is rising and green, with PVI > PEMA, bullish conditions are strong.
When the histogram is falling and red, with PVI < PEMA, bearish pressure is dominant.
Entry Filtering: Combine with your price action or breakout strategy to confirm whether volume supports the move.
Early Warning: Use histogram color shifts or bar colors to identify early momentum changes before price reacts.
Divergence Spotting: Watch for cases where price makes a new high/low, but momentum (histogram or PVI_NVI) fails to confirm, signaling a possible reversal.
⚙️ Settings Overview:
ROC MA Length: Controls the sensitivity of the smoothed ROC components.
Delta MA Length: Determines how reactive the net momentum line (PVI_NVI) is.
Avg Delta MA Length: Governs the smoothing for the final confirmation line (PEMA).
Color Bars: Toggles whether chart bars are color-coded based on momentum.